Romania Freight Transport Report Q4 2009

Romania Freight Transport Report Q4 2009

In August 2009, the Romanian Railway Industry Association suggested that it would not be possible to
sell the state-owned freight rail company, Freight Rail Transport Company (or CFR Marfa), for more
than EUR 500mn (US$715mn). The newspaper, Gandul, quoted the association’s general secretary,
Stefan Roseanu, as saying: ‘The European railway freight market is liberalised, and a railway system is
now being built on a EU-level, where the operators that count are the ones that have the capacity to
transport long distances, and that’s not the case of CFR Marfa’.The comment came after the transport
minister, Radu Berceanu, had said that the company would be privatised by the end of 2010 and that its
sale would bring ‘a few billion euros’ to the state’s coffers. CFR Marfa reported a loss of RON169.4mn
(US$57.6mn) in 2008, after a net profit of RON4.7mn in 2007. Last year’s revenue fell by 6.2% to
RON1.8bn.
Since our last report, we have further reduced our gross domestic product GDP growth forecast for this
year. We now expect GDP to contract by 5.7%. As a result, average annual economic growth over the
next five years will come down to only 0.9%, compared to 6.8% in 2004-2008. The overall effect on our
freight traffic forecasts when comparing the two five-year periods is therefore very negative. We have
also made adjustments to our mode-specific freight carried forecasts. The effect of these changes is that
we are now predicting average annual growth in freight carried across all modes, measured in million
tonnes per kilometre (mntkm), of 1% in 2009-2013. This figure is marginally ahead of GDP growth.
All transport modes are being affected by the recession. Rail freight traffic will drop, but when the
recovery takes hold, competition begins to increase and investments take effect, growth will resume. For
the 2009-2013 forecast period, the annual rate of growth in rail freight traffic will be 0.8% - slower than
overall economic growth. Freight traffic by road will fare better, with investment in new roads acting as a
positive. However, the financial downturn has caused a severe liquidity crisis for Romanian road haulage
firms, and around 20% of them are expected to go bankrupt in 2009. We are forecasting annual average
growth of 1.2% in 2009-2013 for road haulage, significantly above the average annual rate of GDP
expansion. Inland waterway traffic will rise by an annual average of 1.1% as bottlenecks are removed
from the Danube; although 2009 should see a substantial drop in freight traffic linked to falling
commercial activity. Maritime freight will contract by an annual average of 3.6%, with the steep fall in
2009 being the overriding factor. Airfreight will see growth of 2.2%, hit by the shakeout of low-cost
airlines across Europe.

Executive Summary ....5
SWOT Analysis............6
Freight Industry SWOT...... 6
Romania Political SWOT... 6
Romania Economic SWOT. 7
Romania Business Environment SWOT 7
Business Environment Ratings .....8
Table: Europe Freight Transport Business Environment Ratings........ 8
Freight Industry Ranking... 9
Romania’s Logistics Performance Index (LPI) ... 9
Political Risk Summary.... 10
Economic Risk Summary.. 11
Business Environment Risk Summary . 12
Legal Framework............. 12
Labour Force 14
Industry Trends And Developments .........16
Rail . 16
Sea .. 16
Industry Forecast Scenario ..........19
Global Oil Products Market Review... 19
Table Global Oil Prices, 2003-2013 (US$ per barrel).... 23
Macroeconomic Outlook.. 23
Table: Romania – Economic Activity, 2006-2013........... 25
Transport Outlook ........... 26
Table: Romania’s Freight Transport Indicators, 2006-2013 27
Table: Freight Carried, Domestic And International, 2006-2013....... 28
Trade Environment....29
Table: Value Of Imports By Category, 2006-2013 (US$mn) 29
Table: Value Of Exports By Category, 2006-2013 (US$mn) 30
Table: Romania’s Top Export Destinations, 2002-2006 (US$mn)...... 31
Table: Export Trade, 2003-2006 (% growth y-o-y)........ 32
Table: Import Trade, 2003-2006 (% growth y-o-y)......... 32
Table: Top Import Sources, 2002-2006 (US$mn) ........... 33
Market Overview........34
Multi-Modal....... 34
Infrastructure 34
Competitive Landscape: Multi-Modal. 34
Road..... 36
Infrastructure 36
Competitive Landscape: Road ....... 36
Rail ...... 40
Infrastructure 40
Competitive Landscape: Rail ......... 41
Company Profile: CFR Marfa SA.. 44
Air........ 46
Infrastructure 46
Competitive Landscape: Aviation .. 46
Company Profile: Tarom. 49
Water ... 51
Infrastructure 51
Competitive Landscape: Maritime. 52
Pipelines ............ 55
Infrastructure 55
Competitive Landscape: Pipelines. 55
Country Snapshot: Romania Demographic Data........59
Section 1: Population....... 59
Section 2: Education And Healthcare. 60
Table: Vital Statistics, 2005-2030.. 60
Section 3: Labour Market And Spending Power ............. 61
Table: Employment Indicators, 2001-2006....... 61
Table: Consumer Expenditure, 2005-2010 (US$) ........... 61
Table: Average Annual Wages, 2006-2010....... 62
BMI Methodology ......63
How We Generate Our Industry Forecasts ....... 63
Transport Industry ........... 63
Sources 64